The $150-billion fund, which provides income to state and local government retirees, takes an ownership stake in fast-growing companies hoping for a high return when it cashes out. Some investments soar while others flop, but the average return is 30 percent.

Sleepy's chief financial officer Joseph Graci said pension fund officials haven't tried to meddle in the operations of his 55-year-old chain. "Day-to-day decisions are left up to management," he told the Action Long Island business group.

The pension fund invested $12.9 million in Sleepy's earlier this year. It put $4.1 million in PACS, which makes electrical switching equipment for trains, power plants and factories.

PACS chief executive Bruce Dalis said pension money, along with that from other investors, has helped his company to expand and add jobs. "The investors only got involved when we made an acquisition," he said.

The pension fund's sole trustee, state Comptroller Thomas DiNapoli, said it has invested in six companies locally since the In-State Private Equity Program began in 2000.

"We are very patient investors," he told the crowd of about 100 business people. "Our goal is to make money for the pension fund. This isn't a loan or a grant. We're taking an equity position in companies."

DiNapoli has doubled the pension dollars available for aiding in-state businesses to $1 billion since becoming comptroller in 2007. About $600 million has been invested so far.

He said, "We have the capital but we aren't interested in micromanaging these firms."